Why mainlanders are turning to Hong Kong again for new iPhones

China’s social networks have been abuzz with chatter over the new iPhones since their debut in the mainland.

Many consider an iPhone a status symbol, so it’s not unusual to see people flaunt it on social media, especially if they got hold of it ahead of others.

But simply being able to buy it is apparently a big deal.

That’s because despite Apple chief Tim Cook’s assurances of ample supply for the Chinese market, fans often get an “out of stock” reply at sales counters.

The shortage is spreading to big telcos and online vendors as well.

Carriers typically offer tailor-made iPhone plans to lure customers but figures from branches of the three national telcos in Guangdong province show they have problems keeping up with the demand.

A source close to China Mobile told China Business News that the three carriers have received the first batch of 430,000 iPhones, with China Mobile getting 300,000 units, China Unicom 70,000 and China Telecom 60,000.

China Unicom’s Guangdong branch alone had 150,000 customers on the waiting list, 10 times its allocation.

Apple cranks out seven iPhone 6 for every three iPhone 6 Plus but Chinese buyers prefer the latter not only for its larger 5.5-inch display but also for showing off.

Apple will ship 200,000 units by the end of the month to major online vendors including Gome, Suning and JD.com but the number falls short of pent-up demand.

This is good news for scalpers and speculators in Hong Kong’s grey market. Mainlanders are again turning to Hong Kong for supply reminiscent of the frenetic black market last month when the new iPhones were not yet available in the mainland.

The bad news is that Hong Kong is now also having supply problems. The new iPhones are sold out in the three Apple stores and individual purchases are not entertained unless orders are pre-confirmed on Apple’s website.

During a recent visit to China, Cook saw what it would take to quench the Chinese thirst for his flagship devices.

He has reportedly offered incentives to Taiwan iPhone contract maker Foxconn to ramp up production.

Pegatron, another Taiwan manufacturer, will produce 25 million iPhone 6 by the end of the year, giving Foxconn’s production lines more room to make iPhone 6 Plus.

Whenever something is in tight supply, sellers tend to hoard it and let buyers fall over each other, exacerbating the shortage.

And when the market takes the bait, profiteers strike by rigging prices.

A 64-gigabyte gold iPhone 6 Plus, arguably the most popular model in China, is changing hands at almost 8,000 yuan (US$1,308) in Huaqiangbei, about 1,000 yuan more than the official retail price.

Huaqiangbei is one of China’s largest resell markets for smartphones and laptops, mostly sourced from Hong Kong.

Traders there reportedly limit sales to 300 units a day to maintain a 1,200 yuan premium.

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